Macron’s government unveils controversial labour reforms

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French Prime Minister Édouard Philippe and French Labour Minister Muriel Pénicaud give a press conference about the new labour code with French unions at the Hôtel Matignon in Paris on August 31, 2017.

After meeting with trade unions on Thursday, the French government unveiled President Emmanuel Macron’s controversial labour reforms, vowing to "free up the energy of the workforce" by making it easier for employers to hire and fire.

French Prime Minister Édouard Philippe and Labour Minister Muriel Pénicaud met with trade unionists on Thursday before publicly unveiling the labour reform measures, which are detailed on some 200 pages.

The highly anticipated and controversial labour reforms, a centerpiece of Macron’s election pledge, are aimed at creating jobs.

The changes will be implemented via executive order, allowing Macron to avoid a lengthy parliamentary debate. The overhaul will be adopted by the government in September and must then be ratified by parliament, where the president's La République en Marche (Republic on the Move) party has a large majority.

'Ambitious and fair' labour reforms

According to the labour reform proposals, indemnities set by employment tribunals will be capped at three months’ salary for employees with more than two years employment and up to 20 months for those with 30 years of employment.

The measures will allow for very small companies (fewer than 20 employees) to negotiate with a non-elected employee, not mandated by a trade union. In companies with 20-50 employees, negotiations will involve an elected staff member, not necessarily someone appointed by a union.

Philippe has described the labour reforms, the result of three months of negotiations with trade unions, “ambitious, balanced and fair”. After “decades of mass unemployment […] nobody today could seriously not support our right, and our working right in particular, to favour employment […] that efficiently protects and helps the efficient, long-lasting development of companies,” the prime minister said at the press conference.

Criticism from trade unions

Right after the announcement of the reforms, some unions voiced criticism, denouncing measures that they perceive to be more favourable to companies than to employees.

Philippe Martinez, secretary-general of the CGT trade union, lashed out Thursday, saying, "All our fears have been confirmed and the additional fear is obvious and has been written: It’s the end of the working contract.” He qualified the reform as "old recipes which will not change the lot of the people."

The communist-backed CGT has opposed the changes outright and is set to mobilise its supporters on September 12 for a street protest. Jean-Luc Mélenchon, the far-left leader of France Insoumise (Unbowed France) and a fierce opponent to Macron, is organising another protest on September 23.

France’s biggest private sector union, the CFDT, declared itself “disappointed” but said it would not be calling its members to join the CGT’s planned street protest on September 12.

Nevertheless, the CFDT is unhappy with the level at which dismissal awards in France's labour courts will be capped, and unhappy with a section of the reforms in which employers will be allowed to negotiate directly with staff in companies with fewer than 20 workers.

The boss of the hard-left Force Ouvrière (FO) union, Jean-Claude Mailly, said he disagreed with some of the changes, but like Berger suggested he would not recommend his members join street protests.

Meanwhile, François Asselin, president of France’s confederation of small and medium-sized companies, the CPME, has praised the reform for being “particularly pragmatic”.

Macron’s reasoning for reforms

Thursday's reforms come at a pivotal moment for Macron's domestic agenda as he seeks to encourage entrepreneurship in France, where the unemployment rate of 9.5 percent is almost double that of its large European rivals.

He argues the measures are needed to introduce greater flexibility in France's rigid labour law to encourage hiring.

"We are the only major economy in the European Union that has not defeated mass unemployment for more than three decades," he told Le Point magazine in an interview published late on Wednesday.

The high-stake reforms come as Macron’s popularity has plummeted to 40 percent, according to French daily Le Figaro.